High Risk Merchant
High risk merchants are companies that are engaged in business pursuits which carry a higher
degree of risk to credit card companies, and banks and other entities that provide merchant
account services. Factors that determine if a given concern qualifies as a high risk, include
the type of business conducted, the location of the business, and the potential for credit
card abuse at those locations. A high risk merchant can usually obtain merchant account
services, but will pay additional fees for the ability to process credit and debit cards.
Examples of businesses that are considered high risk merchants include pharmaceuticals,
inbound/outbound telemarketing, infomercials, and travel and cruise industries.
High risk merchants have industry proven risk factors for "excessive" chargebacks/disputes,
refunds, product/service/customer dissatisfaction, purchase remorse and business abandonment.
These businesses are also often subject to excessive incidences of fraud, and theft.
When high risk merchants are applying for an account they often have to choose longer terms.
High risk merchants are also subject to application fees that range in amount depending on
level of risk deemed by the bank or financial institution. These fees are usually non-refundable.
